Gilead Sciences says it has signed a $105 million dollars licensing agreement with Japan Tobacco, for the rights to develop and commercialise the latter’s HIV treatment, JTK-303), in all countries of the world, excluding Japan.

Under the terms of the agreement, Gilead will pay to JT an upfront payment of $15 million and additional cash payments of up to $90 million upon the achievement of certain undisclosed milestones. Gilead will also pay to JT a royalty based on future product sales in the territories where Gilead will market the drug.

As a result of the deal, Gilead says its research and development spending for 2005 will fall in the $250 to $270 million range, up from the previous guidance of $240 to $260 million.

JTK-303 is an integrase inhibitor. Integrase is one of the key enzymes required for HIV to replicate – by inhibiting the enzyme, the integration of HIV DNA into the DNA of immune system cells (the process by which infection occurs) is disabled. The compound in question has already completed a Phase I study in Japan and Gilead aims to start Phase I/II clinical trials in HIV-positive patients by mid-year.